Question

Which of the following is the primary benefit of the federal government investing in physical capital?

Answer 1

The primary benefit of the federal government investing in physical capital is : increase in infrastructure
Physical capital refers to manmade technologies to increase the efficiency of production, such as factory machineries

Answer 2

The correct answer is “increase in infrastructure”

Since the 1700s the US Federal Government has invested in physical capital. This aimed to promote economic growth, the first benefits of these investments were in transportation infrastructures like roads, ports and harbors, railroads and others. It also included subsidies for aviation, multipurpose dams and other water projects.